performance management and strategic mngmt.ppt

. Overview of Strategic Planning and Performance Management
The presentation starts by defining and linking performance management to strategic planning. Strategic planning is the process that sets the organization's destination by evaluating its internal and external environment, while performance management is the system that aligns employees’ behaviors, skills, and performance with the company’s strategic goals​(aguinis_pm3_ppt_03).

2. Strategic Planning: Definition and Purpose
Strategic planning helps organizations identify their mission, vision, and goals, providing a roadmap for future actions. It is essential for helping organizations define their identity, prepare for change, and allocate resources to maintain a competitive advantage. The goal of strategic planning is to ensure that resources are aligned with the organization’s mission to gain a competitive edge​(aguinis_pm3_ppt_03).

The purposes of strategic planning include preparing the organization for future challenges, enhancing adaptability to environmental changes, and creating a focused culture of cooperation. It encourages organizations to identify new opportunities, make informed decisions, and provide employees with clear directions to guide their daily work​(aguinis_pm3_ppt_03).

3. Environmental Analysis and Gap Analysis
The presentation details the importance of Environmental Analysis, which identifies internal and external trends affecting an organization. External trends consist of opportunities and threats that come from economic, social, technological, political, legal, and competitive factors, while internal trends include the organization’s strengths and weaknesses​(aguinis_pm3_ppt_03).

A Gap Analysis bridges the gap between external opportunities and internal capabilities. It helps organizations make decisions by identifying leverage points, constraints, vulnerabilities, and problems based on the interaction of external and internal factors​(aguinis_pm3_ppt_03).

4. Mission, Vision, and Goal Setting
The Mission Statement answers core questions such as why the organization exists, what products or services it offers, who its customers are, and what makes its offerings unique. It can also include the organization's values, beliefs, managerial philosophy, and public image​(aguinis_pm3_ppt_03).

A Vision Statement outlines the organization’s future aspirations and sets the context for evaluating opportunities and threats. A strong vision statement should be brief, verifiable, focused, understandable, inspiring, and aspirational, serving as a guide for long-term strategies​(aguinis_pm3_ppt_03).

5. Setting Organizational Goals and Developing Strategies
The presentation emphasizes that setting goals formalizes the expected achievements and provides motivation. Goals also offer measurable targets for performance evaluation, enabling organizations to make informed decisions about resource allocation​(aguinis_pm3_ppt_03).

Strategies, or game plans, are developed to addres

1. Chapter 3Chapter 3
Performance Performance
Management and Management and
Strategic PlanningStrategic Planning
3-3-11

2. OverviewOverview

Definition and Purposes of Strategic Definition and Purposes of Strategic
PlanningPlanning

Linking Performance Management to Linking Performance Management to
the Strategic Planthe Strategic Plan
•Strategic Planning Strategic Planning
•Developing Strategic Plans at the Unit LevelDeveloping Strategic Plans at the Unit Level
•Job DescriptionsJob Descriptions
•Individual and Team PerformanceIndividual and Team Performance

Building SupportBuilding Support
3-3-22

3. Strategic Planning: Definition Strategic Planning: Definition

ProcessProcess
•Describe the organization’s Describe the organization’s
destinationdestination
•Assess barriersAssess barriers
•Select approaches for Select approaches for
moving forwardmoving forward
3-3-33

4. Strategic Planning: GoalStrategic Planning: Goal

Allocate resources to provide the Allocate resources to provide the
organization with competitive organization with competitive
advantageadvantage
3-3-44

5. Strategic Planning: PurposesStrategic Planning: Purposes

Help define the organization’s identityHelp define the organization’s identity

Help the organization prepare for the Help the organization prepare for the
futurefuture

Enhance the ability to adapt to Enhance the ability to adapt to
environmental changeenvironmental change

Provide focus and allow for better Provide focus and allow for better
allocation of resourcesallocation of resources
3-3-55

6. Strategic Planning: Purposes Strategic Planning: Purposes
(Continued)(Continued)

Produce an organizational Produce an organizational
culture of cooperationculture of cooperation

Allow for the consideration of Allow for the consideration of
new options and opportunitiesnew options and opportunities

Provide employees with Provide employees with
information to direct daily information to direct daily
activitiesactivities
3-3-66

7. Strategic Planning : OverviewStrategic Planning : Overview
1.1.Environmental AnalysisEnvironmental Analysis
2.2.MissionMission
3.3.VisionVision
4.4.GoalsGoals
5.5.StrategiesStrategies
3-3-77

8. Environmental AnalysisEnvironmental Analysis
Identifies external and internal Identifies external and internal
trendstrends

To understand broad industry To understand broad industry
issuesissues

To make decisions using “big To make decisions using “big
picture” contextpicture” context
3-3-88

9. External TrendsExternal Trends

Opportunities:Opportunities:
•Environmental characteristics that Environmental characteristics that
can can helphelp the organization succeed the organization succeed

Threats: Threats:
•Environmental characteristics that Environmental characteristics that
can can preventprevent the organization from the organization from
being successfulbeing successful
3-3-99

10. External Trends—External Trends—
Factors to ConsiderFactors to Consider

EconomicEconomic

Political/Legal Political/Legal

Social Social

TechnologicalTechnological

CompetitorsCompetitors

CustomersCustomers

SuppliersSuppliers
3-3-1010

11. Internal TrendsInternal Trends

Strengths:Strengths:
•Internal characteristics that the Internal characteristics that the
organization can organization can use for its use for its
advantageadvantage

Weaknesses:Weaknesses:
•Internal characteristics that can Internal characteristics that can
hinder the successhinder the success of the of the
organizationorganization
3-3-1111

12. Internal Trends— Internal Trends—
Factors to ConsiderFactors to Consider

Organizational structureOrganizational structure

Organizational cultureOrganizational culture

PoliticsPolitics

ProcessesProcesses

SizeSize
3-3-1212

13. Gap AnalysisGap Analysis
Analyzes:Analyzes:
External environment External environment
(opportunities and threats)(opportunities and threats)
vis-à-visvis-à-vis
Internal environmentInternal environment
(strengths and weaknesses)(strengths and weaknesses)
3-3-1313

14. Gap Analysis Determines:Gap Analysis Determines:
Opportunity +Opportunity + Strength = Strength = LeverageLeverage
Opportunity + Weakness = Opportunity + Weakness =
ConstraintConstraint
Threat + Strength = Threat + Strength = Vulnerability Vulnerability
Threat + Weakness = Threat + Weakness = ProblemProblem
3-3-1414

15. Strategic Planning for the Strategic Planning for the
OrganizationOrganization
Environmental and Gap Environmental and Gap
Analyses provide information Analyses provide information
for organizations to decide:for organizations to decide:
Who they areWho they are
What they doWhat they do
3-3-1515

16. MissionMission
A good mission statement answers:A good mission statement answers:

Why does the organization exist?Why does the organization exist?

What is the scope of the What is the scope of the
organization’s activities?organization’s activities?

Who are the customers served?Who are the customers served?

What are the products or services What are the products or services
offered?offered?
3-3-1616

17. Mission Statement contains:Mission Statement contains:
Information on an organization’sInformation on an organization’s
Basic product/service to be offeredBasic product/service to be offered
Primary market/customer groupsPrimary market/customer groups
Unique benefits and advantages of Unique benefits and advantages of
product/servicesproduct/services
Technology to be usedTechnology to be used
Concern for survival through Concern for survival through
growth and profitabilitygrowth and profitability
3-3-1717

18. Mission Statement Mission Statement MayMay
Contain:Contain:
Information on an organization’s Information on an organization’s
values and beliefsvalues and beliefs
Managerial philosophyManagerial philosophy
Public image sought by organizationPublic image sought by organization
Self-concept of business adopted bySelf-concept of business adopted by
•EmployeesEmployees
•StockholdersStockholders
3-3-1818

19. VisionVision

Statement of future aspirationsStatement of future aspirations

Focuses attention on what is Focuses attention on what is
importantimportant

Provides context for evaluatingProvides context for evaluating
•OpportunitiesOpportunities
•ThreatsThreats
3-3-1919

20. A Good Vision Statement:A Good Vision Statement:
Eight CharacteristicsEight Characteristics
1.1.BriefBrief
2.2.VerifiableVerifiable
3.3.Bound by a TimelineBound by a Timeline
4.4.CurrentCurrent
3-3-2020

21. A Good Vision Statement:A Good Vision Statement:
Eight Characteristics Eight Characteristics (Continued)(Continued)
5.5.FocusedFocused
6.6.UnderstandableUnderstandable
7.7.InspiringInspiring
8.8.A stretchA stretch
3-3-2121

22. Purposes for Setting GoalsPurposes for Setting Goals

Formalize expected achievementsFormalize expected achievements

Provide motivationProvide motivation

Provide tangible targets Provide tangible targets

Provide the basis for good decisionsProvide the basis for good decisions

Provide the basis for performance Provide the basis for performance
measurementmeasurement
3-3-2222

23. StrategiesStrategies

Create strategies, game plans or Create strategies, game plans or
“How to” procedures to address “How to” procedures to address
issues of:issues of:
•GrowthGrowth
•SurvivalSurvival
•TurnaroundTurnaround
•StabilityStability
•InnovationInnovation
•LeadershipLeadership
3-3-2323

24. How the HR Function How the HR Function
Contributes:Contributes:

Communicate knowledge of Communicate knowledge of
strategic planstrategic plan

Provide knowledge of KSAs Provide knowledge of KSAs
needed for strategy needed for strategy
implementationimplementation

Propose reward systemsPropose reward systems
3-3-2424

25. Strategic Plans at the Unit LevelStrategic Plans at the Unit Level

EveryEvery Unit Unit mission statement, mission statement,
vision statement, goals, and vision statement, goals, and
strategiesstrategies
Must clearly Must clearly alignalign with with
and and be congruentbe congruent with with

thethe Organization’s Organization’s mission mission
statement, vision statement, goals, statement, vision statement, goals,
and strategiesand strategies
3-3-2525

26. Alignment of Strategic Plan with Alignment of Strategic Plan with
PerformancePerformance
3-3-2626
Job Description
Tasks, KSAs
Individual and Team Performance
Results, Behaviors, Developmental Plan
Organization’s Strategic Plan
Mission, Vision, Goals, Strategies
Unit’s Strategic Plan
Mission, Vision, Goals, Strategies
Critical to involve all
levels of
management
Critical to involve all
employees

27. Strategic ConsensusStrategic Consensus

Definition: The state in which Definition: The state in which
various organizational units various organizational units
agree on a common set of agree on a common set of
strategic prioritiesstrategic priorities
•Predicts firm performancePredicts firm performance
3-3-2727

28. Two Ways to Achieve Strategic Two Ways to Achieve Strategic
ConsensusConsensus

Strategies Strategies  Goals Goals
vs.vs.

Goals Goals  Strategies Strategies
•Strategies Strategies  Goals better predicts Goals better predicts
firm performancefirm performance
3-3-2828

29. Job DescriptionsJob Descriptions

Tasks and KSAs are Tasks and KSAs are
congruent with Organization congruent with Organization
and Unit strategic plans.and Unit strategic plans.

Activities described support Activities described support
mission and vision of mission and vision of
Organization and Unit.Organization and Unit.
3-3-2929

30. Individual and Team Individual and Team
PerformancePerformance
Organization and Unit mission, Organization and Unit mission,
vision, goals lead to:vision, goals lead to:

Performance management system, Performance management system,
which:which:
Motivates employees Motivates employees
Aligns development plans with Aligns development plans with
organization prioritiesorganization priorities
3-3-3030

31. Strategic Plan Strategic Plan 
Six Choices in PM System DesignSix Choices in PM System Design
1.1.Criteria (Behavior vs. Results)Criteria (Behavior vs. Results)
2.2.Participation (Low vs. High)Participation (Low vs. High)
3.3.Temporal Dimension (Short Temporal Dimension (Short
Term vs. Long Term)Term vs. Long Term)
3-3-3131

32. Strategic Plan Strategic Plan 
Six Choices in PM System Design Six Choices in PM System Design
(Continued)(Continued)
4.4.Level of Criteria (Individual vs. Level of Criteria (Individual vs.
Team/Group)Team/Group)
5.5.System Orientation (Developmental System Orientation (Developmental
vs. Administrative)vs. Administrative)
6.6.Rewards (Pay for Performance vs. Rewards (Pay for Performance vs.
Tenure/Position)Tenure/Position)
3-3-3232

33. Building Support—Building Support—
Answering “What’s in It for Me?”Answering “What’s in It for Me?”

For top management support: For top management support:
•Emphasize that PM helps carry out an Emphasize that PM helps carry out an
organization’s visionorganization’s vision

For support from all levels: For support from all levels:
•Clearly communicate nature and Clearly communicate nature and
consequences of PMconsequences of PM
•Involve employees in the process of Involve employees in the process of
PM design and implementationPM design and implementation
3-3-3333

34. Quick ReviewQuick Review

Definition and Purposes of Strategic Definition and Purposes of Strategic
PlanningPlanning

Linking Performance Management to the Linking Performance Management to the
Strategic PlanStrategic Plan
•Strategic Planning Strategic Planning
•Developing Strategic Plans at the Unit LevelDeveloping Strategic Plans at the Unit Level
•Job DescriptionsJob Descriptions
•Individual and Team PerformanceIndividual and Team Performance

Building SupportBuilding Support
3-3-3434